Economics

The predominant narrative on Sino-African relations is relatively simple. After more than three decades of sustained economic expansion, China is an economic juggernaut, with trade and investment overflowing its borders and into the global market. One the one hand, China, with its overcapacity, seeks new markets and new places from which to secure natural resources to keep the economic machine going. On the other, Western disengagement from Africa since the end of the Cold War has been filled in part by China, and China-Africa relations need to be understood as the logical outcome of the marginalization of Africa in the age of globalization in which Africa is hungry for development, investment, and capital.

Africa is, as far as development is concerned, the next frontier. China is leading the charge in setting up factories and businesses across the continent. McKinsey’s Irene Yuan Sun writes in The Next Factory of the World that this will help Africa become a “global manufacturing powerhouse” as it follows China’s path to industrialization. However optimistic this may sound, Sun argues that not only did China do this itself during the 1990s and 2000s, but that it is already working in Africa.

The rise and fall of Brazil, Russia, India, and China, the so-called BRIC nations, is the great geo-economic story of the twenty-first century. In the early 2000s, these countries were tipped to redraw the economic map of the world. With a combined population of nearly 3 billion, they constituted roughly 40 percent of the world’s people. Throughout the first decade of the new millennium, they were among the fastest-growing countries in the world, sailing through the 2008-2009 global financial crisis in a way that made them the envy of the world. When the long-standing G-7 group of developed countries proved unable to meet the challenges posed by the crisis, the wider G-20—including all four BRICs economies—rose to the occasion. At a time when developed countries were talking austerity, the BRICs countries opened the taps on government spending. The crisis did not turn into the second Great Depression (though it looked as though it might in early 2009). For this, surely some of the credit goes to the swift action taken by the BRICs to stimulate domestic demand.